Ofwat to update how it approaches water merger cases

Ofwat is consulting until 21 January on a revised approach to water company mergers under the special merger regime set out in the Water Industry Act 1991, and an updated statement of methods for the assessment of mergers.

The current approach dates to 2015. While the Competition and Markets Authority decides whether to allow a merger between water and/or wastewater companies, Ofwat must provide an opinion on whether a merger has prejudiced or is likely to prejudice its ability to make comparisons and whether there are relevant customer benefits that outweigh any prejudice identified.

It said the update reflects changes in the regulatory landscape and recent merger experience. Ofwat discussed: how it assess prejudice; how it assesses potential customer benefits; undertakings in lieu; the investigation process; and Ofwat’s expectations of merger parties.